Canadian regulator bows to pressure from Ottawa and reviews decision to force smaller ISPs to end unlimited Internet access packages.

The CRTC, the country's broadcast regulator, late Thursday bowed to pressure from Ottawa and signaled a retreat on plans to end unlimited online access packages offered by small Internet service providers (ISPs).

CRTC chairman Konrad von Finckenstein said the regulator will delay introducing usage-based billing for customers of smaller ISPs for 60 days, and will review the file.

The retreat follows an order received earlier on Thursday from federal industry minister Tony Clement to reverse a January 25 decision to deny Canadians the ability to download unlimited content from Netflix Canada, iTunes and other online video sources without paying overage fees.

Despite being called on the carpet by the federal government, von Finckenstein reiterated his support for usage-based billing.

"We are convinced that Internet services are no different than other public utilities, and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users," the CRTC chair argued.

"For us, it is a question of fundamental fairness. Let me restate: ordinary users should not be forced to subsidize heavy users," von Finckenstein said in a statement.

The feds disagree, and instead back Internet user groups that raised the alarm last week over the CRTC ruling major ISPs like Bell Canada and Rogers Communications can determine usage rates, including overage fees, charged by smaller resellers using their bandwith.